Tag Archives: LIBOR

Investors Seek Nod For $35M HSBC Deal In Yen Libor Suit

Law360, Los Angeles (June 17, 2016, 8:21 PM ET) — HSBC struck a $35 million settlement with investors in a proposed class action alleging the bank fixed yen-denominated Libor rates, in the second monetary deal reached this year with a major bank in the New York federal action over the alleged rate manipulation.

The proposed settlement with HSBC Holdings PLC and HSBC Bank PLC comes two months after a district judge signed off on the investors’ $23 million “ice breaker” settlement with Citigroup Inc. and nonmonetary settlement with brokerage firm RP Martin.

In motion papers Friday,…

Source: Law360

Has Libor scandal cost three bankers their lives? Mystery deaths of three financiers in London, New York and Siena linked to interest rate-rigging

 

  • In March 2013 David Rossi, 51, who worked closely with Deutsche Bank, was found dead in Siena, Italy
  • In January 2014 William Broeksmit, 58, from Deutsche Bank, died in London 
  • In October 2014 Calogero Gambino, 41, another Deutsche Bank employee, died in New York 
  • Deutsche Bank agreed to pay $2.5billion (£1.76billion) to settle claims against it over the Libor scandal 

 

Three bankers, all with ties to Deutsche Bank, committed suicide within the space of 18 months and there is growing speculation their deaths may have been linked to the Libor scandal.

Last year Deutsche Bank agreed to pay $2.5billion (£1.76billion) to resolve investigations in Britain and the US into the activities of its traders.

Meanwhile in Siena, Italy, authorities exhumed the body of banker David Rossi, 51, and reopened their investigation into his death in March 2013.

Mr Rossi, who worked as a communications director at the Monte dei Paschi di Siena bank, was found dead in an alley beneath his office in the city.

Read more: http://www.dailymail.co.uk/news/article-3638560/Mystery-suicides-international-bankers-deaths-three-financiers-London-New-York-Siena-linked-Libor-scandal.html#ixzz4Bcr2nCbJ

 

Bankers, Not Banks, on Trial in Barclays Libor Case, SFO Says

A London prosecutor told jurors they didn’t have to decide whether the banking industry as a whole is guilty of fraud, but just the five former Barclays Plc traders accused of manipulating Libor.

James Hines, a prosecutor for the Serious Fraud Office, made the argument Wednesday as he asked the jurors to disregard testimony by the five bankers that manipulation of benchmarks was an everyday occurrence, not only in the bank but also across the City of London.

“The banking industry isn’t on trial, it is a handful of dishonest traders,” Hines said on the second day of his closing argument.

Alex Pabon, Stylianos Contogoulas, Jay Merchant, Jonathan Mathew and Ryan Reich are on trial for conspiring to fix the London interbank offered rate, a benchmark tied to trillions of dollars in securities and loans, between 2005 and 2007. They face as long as 10 years in prison if convicted.

Merchant, in particular, said the culture of making the requests was fostered by senior managers at the bank despite there being no e-mail or documentary evidence they instructed traders to act dishonestly, Hines said.

Read on.

First U.S Trader Charged in Libor Rate-Rigging Probe — Update

Two former Deutsche Bank AG traders face criminal charges for allegedly trying to manipulate the Libor benchmark interest rate, including the first U.S. trader to be charged in connection with the yearslong probe.

Matthew Connolly, 51 years old, former head of the bank’s pool trading desk in New York, and Gavin Campbell Black, 46, a former derivatives trader in London, were accused of trying to rig the London interbank offered rate, an interest-rate benchmark, between 2005 and 2011 to benefit the bank’s trading positions, according to an indictment unsealed on Thursday.

Mr. Connolly, who was taken into custody on Thursday, according to the Justice Department, is the first U.S. trader to be charged in the case.

Deutsche Bank declined to comment.

A third former Deutsche Bank trader, Michael Curtler, who supervised Mr. Black, pleaded guilty in October 2015. The bank paid $2.5 billion to resolve related criminal and civil charges against it in April 2015.

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Ex-Barclays Trader Disrupts Libor Testimony Shouting ‘No

A former Barclays Plc trader on trial for rigging Libor was admonished by the judge for an outburst that interrupted a co-defendant being questioned by a prosecutor.

Ryan Reich shouted “no, no, no, no,” from his seat on Friday after the prosecutor asked fellow ex-Barclays trader Alex Pabon on the stand if the Libor rate affected swaps valuations. After the interruption, Reich’s lawyer told him to be quiet and Judge Anthony Leonard said “interruptions should not take place.” Pabon answered that, yes, Libor did affect swaps valuations.

Reich and Pabon are on trial with former colleagues Stylianos Contogoulas, Jay Merchant and Jonathan Mathew for conspiring from 2005 through 2007 to fix the London interbank offered rate, or Libor, a benchmark tied to trillions of dollars in securities and loans. Another ex-trader, Peter Johnson, has pleaded guilty to the charge.

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Citibank To Pay CFTC $425M Over Benchmark Manipulation

Law360, New York (May 25, 2016, 9:40 AM ET) — The U.S. Commodity Futures Trading Commission said on Wednesday that it has struck two deals with Citibank NA and affiliates totaling $425 million to end allegations that the bank manipulated the Japanese and British interbank offered rates, as well as a global benchmark for interest rate products.

Citibank and its Japanese affiliates will pay $175 million to settle CFTC claims that the bank tweaked LIBOR submissions based on internal concerns. Citibank will also pay $250 million in civil fines to settle other allegations. (Credit: AP) The…

Source: Law360

16 Big Banks To Face Revived Libor Antitrust Suit

Law360, New York (May 23, 2016, 11:49 AM ET) — A federal appellate panel on Monday revived an antitrust lawsuit against 16 big banks, including  Citigroup, JPMorgan Chase and Bank of America, alleging they rigged the London Interbank Offered Rate.

A three-judge Second Circuit panel ruled that Manhattan U.S. District Judge Naomi Reice Buchwald was wrong when she dismissed the complaints against the banks on the grounds that the plaintiffs had failed to allege injury under antitrust law. The panel instead found that the proceedings should be reopened because antitrust law does not require that plaintiffs…

Source: Law360

Banks identify possible replacements for U.S. Libor

A group of global banks and clearing houses, working with U.S. regulators, said on Friday it has identified two possible replacements for Libor, the benchmark interest rate for $160 trillion worth of credit for everything from home mortgages to corporate loans.

The Alternative Reference Rates Committee (ARRC) said that together with the Federal Reserve it has identified the Fed’s Overnight Bank Funding Rate (OBFR) and the overnight rate on U.S. Treasury securities pledged as collateral in repurchase, or repo, transactions as alternatives.

The London Interbank Offered Rate has been in regulators’ cross hairs since its credibility was tarnished by a rate-rigging scandal emerging from the 2008 financial crisis. About a dozen global banks collectively have paid tens of billions of dollars in fines to settle the matter.

“The case for moving ahead to a new benchmark is very strong. The new benchmark is going be robust with a lot of transactions and will be resistant to manipulation,” Fed Governor Jerome Powell told Reuters.

ARRC said the two rates it identified as replacements represent “robust” markets, each with $300 billion worth of daily trades. Bankers and regulators have raised alarms about diminishing daily liquidity in the markets for unsecured loans like Libor, calling into question their reliability as a gauge for U.S. borrowing costs.

The stakes are large: Libor’s benchmark 3-month rate stands as a reference rate for pricing $160 trillion of loans in the United States and, together with companion rates in Europe and Asia, has some $350 trillion of global credit tied to it.

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Ex-Barclays trader tells court Libor rate promise was ‘just banter’

A former Barclays trader accused of conspiring to rig a global interest rate said a promise to name a colleague in a book and to invite him to his bar in return for help in setting Libor was “just banter”.

Greek-born Stylianos Contogoulas told Southwark Crown Court on Wednesday that he had been instructed by his boss within days of joining the Barclays dollar desk in 2005 to tell a senior colleague the level he wanted Libor rates set at.

“‎It was done very openly and in a very normal way and gave the impression this was a regular, normal thing,” Contogoulas said on his first day in the witness box.

Contogoulas, 44, is one of five former Barclays bankers charged with conspiracy to defraud by manipulating Libor, the London interbank offered rate, a benchmark for rates on around $450 trillion of financial contracts worldwide.

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Ex-Barclays trader says pressured to lie about Libor setting

One of five former Barclays bankers on trial for the alleged rigging of a key Libor benchmark told a court on Friday he had lied about submitting rates for traders because he felt under pressure from his manager and the bank to “toe the line”.

Jonathan Mathew told the court that he had felt pressured by his manager at the time, Peter Johnson, who jurors heard this week had pleaded guilty in October 2014 to conspiring to manipulate Libor.

Johnson is the first man in Britain to plead guilty to charges related to Libor.

On Friday, Mathew told a London court that he had lied to investigators about taking requests from traders in making submissions to the benchmark, because he was worried he would lose his job and was scared about going up against his boss.

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